Business

Beverage of choice is clear

Bottled water intake nearly outpaces (yes!) beer

Shot with blue light, 16.9-ounce bottles get filled with water last week at the Great Glacier plant in Oxford. The plant's water comes from an artesian well in Marquette County, but some companies specialize in purifying water that originates with municipal water systems.

Joe Koshollek

Doloris Reichhoff grabs freshly filled bottles of Great Glacier artesian water off the line for packing. Great Glacier, with around 40 employees, last fall added a new bottling line costing more than $500,000.

Joe Koshollek

Princeton's Tyka Lemcke drinks bottled water Friday after her 100-meter dash during the 2007 WIAA state track meet in La Crosse. Health concerns are prompting many to switch from sugary soda.

Soda? Milk? How About Water?

Average annual per capita consumption of bottled water grew from 11 to 21 gallons from 1996 to 2006.During that same period, per capita milk< consumption dropped from 22.7 to 19.5 gallons.Beer consumption held steady at 21.8 gallons.Meanwhile, soft drink consumption fell from 52 to 50.9 gallons.

Source: Beverage Digest

The summer's hottest thirst-quencher in its plain form drips from a faucet.

Filter it, pour it in a sleek bottle, give it a glamorous name, and it's something dieters and fitness buffs adore: water.

Americans, on average, drank more bottled water in 2006 than milk, according to trade publication Beverage Digest. And Americans now drink nearly as much bottled water as beer.

But it's not Wisconsin's signature beverages - milk and beer - that are threatened by bottled water's rising tide. Consumers generally don't buy bottled water as a substitute for either milk or beer, beverage industry executives say.

It's high-calorie, sugary drinks such as sodas that are losing ground. Growing concerns about obesity and health issues such as diabetes are fueling the bottled water tide, says a recent report by Mintel International Group Ltd., a market research firm. Even signs of growing environmental concerns about bottled water sales are not slowing down the thirst of consumers for this simplest of drinks.

"People are trying to do better things for their diet," said Todd Hultquist, an independent food industry analyst. Even in the diet soda category, "there are concerns about too much caffeine or carbonation being bad for the teeth."

It's no coincidence that two of the biggest bottled water brands-Aquafina and Dasani-are owned by soda giants PepsiCo Inc. and Coca-Cola Co., respectively.

Coca-Cola, the world's largest beverage company, last month agreed to buy Glaceau, maker of fruity, nutrient-enhanced Vitaminwater, for $4.1 billion. PepsiCo tapped another bottled water trend when it added fruit flavoring to its Aquafina.

Aside from health concerns, people willing to shell out money for bottled water instead of drinking free tap water often are seeking a better tasting beverage, according to Tom Rogers, whose family owns water bottler Great Glacier of Wisconsin Inc. of Oxford.

"Most people don't like the taste of chlorine," Rogers said.

Beyond the tap

Milwaukeean Tim Ball says he and his girlfriend, Marie Johnson, buy bottled water because it tastes better. They have water delivered to their home in 5-gallon jugs.

"Milwaukee has a crappy system," said Ball, a mortgage broker.

Of course, much of bottled water actually originates from city-owned water systems, including the Milwaukee water works.

Purified water draws tap water from municipal water systems and filters it to improve taste and quality. It makes up about half of the bottled water category, and includes brands such as Aquafina and Dasani, plus the local Roundy's brand bottled in Kenosha.

Bottled water also comes from springs and artesian sources both near and far, which enhances the marketing cache. For example, FIJI water bottled in Fiji is "drawn from an artesian aquifer located at the very edge of a primitive rain forest, hundreds of miles away from the nearest continent," the company touts. Icelandic Glacial water comes from Iceland, "largely uninhabited, wholly unspoiled - a land of glaciers, mountains and springs."

The fastest-growing bottled water brands are flavored and enhanced waters - waters with a splash of fruit or vitamins and electrolytes. One new brand even contains fiber: Vitamin+Fiber Water from Nature 101, which claims to help maintain healthy intestinal regularity and glucose levels.

Lately, energy drinks, such as Red Bull, have pulled some of their market share from bottled water sales, said Bill Scott, vice president of marketing and sales for Minneapolis-based Premium Waters Inc.

Premium's brands include Chippewa Spring, which is bottled at the source: a spring in Chippewa Falls, near Eau Claire.

Growth in bottled water sales has slowed somewhat in recent years because of the increasing popularity of energy drinks, Scott said. But the industry is still expanding at a healthy rate, he said. Volume sales for bottled water were up 9.5% in 2006, according to Beverage Marketing Corp.

Adding fluoride

Sales have been helped by new products, as well as sleek packaging innovations. Premium Waters recently began adding fluoride, which helps prevent tooth decay, to its Kandiyohi brand of bottled water, Scott said. The company also has been packaging some brands in smaller 10-ounce bottles that more easily fit in children's lunch boxes, he said.

Premium Waters, which employs about 100 workers in Wisconsin, has benefited from the growth of something unrelated to health: Eau Claire-based home improvement retailer Menard Inc. Premium's brands include Glacier Mist, sold exclusively through Menards stores.

Another expanding Wisconsin company is Great Glacier, which recently changed its name from Neenah Springs Inc. Great Glacier's source is an artesian well in tiny Oxford, in Marquette County.

Great Glacier, with around 40 employees, last fall added a new bottling line costing more than $500,000, Rogers said.

One of the biggest players in Wisconsin's bottled water market is Atlanta-based beverage bottler Coca-Cola Enterprises Inc., which owns a Dasani plant in Milwaukee. That plant, on the city's far northwest side, supplies purified tap water to Wisconsin, as well as the Chicago and Minneapolis areas, company spokesman Kevin Morris said.

Lake Michigan water

Other Wisconsin companies in the bottled water business include some that own private label brands, also known as store brands. Perhaps the biggest is Roundy's Supermarkets Inc., the Milwaukee-based operator of Pick 'n Save, Copps and Rainbow Foods supermarkets in Wisconsin, Minnesota and northern Illinois.

Roundy's purified tap water, found in the company's supermarket chains, has been rolling off the bottling line at the company's central commissary in Kenosha for the past year.

Here's how it works: Lake Michigan water first goes through filtration at the Kenosha water plant. At Roundy's, it goes through a series of general filters to remove sediment, then through a reverse osmosis filter (membrane filtration under high pressure, like dialysis).

About 20% of the water that enters the membrane is removed from the system, leaving 80% of the water in high-quality, purified form that is free of harmful pathogens (including Cryptosporidium), said Mario Jedwabnik, vice president of manufacturing for Roundy's.

While bottled water companies encourage recycling of plastic bottles, there has been a backlash of concern about the environment.

Corporate Accountability International, a Boston-based activist group, is aiming its "Think Outside the Bottle" campaign at bottled water makers PepsiCo, Coca-Cola Co. and Nestlé, which owns Ice Mountain, Arrowhead and other brands, in addition to Aquapod.

The group claims bottling plants operated by "water giants" throughout the world are depleting underground water supplies.

Then there's the issue of the bottles themselves.

The Sierra Club says more than 10 billion plastic water bottles end up as garbage or litter annually.